U.S. stocks gain on Greece, stimulus hopes
Indexes come off highs after euro slips below $1.25
SAN FRANCISCO (MarketWatch) — U.S. stocks rose Tuesday, getting a lift from Greek polls signaling a commitment to the euro currency and on hopes of more global stimulus. But the euro’s drop under $1.25 on concerns over Spain’s solvency took stocks off their highs.
Reuters New polls show more Greeks would choose to stay in the euro zone.
The Dow Jones Industrial Average DJIA +0.84% was up 78.33 points, or 0.6%, to 12,533.65 after rising as much as 157 points. Of 30 components, 24 traded higher.
Caterpillar Inc. CAT +2.59% and United Technologies Corp. UTX +2.37% led Dow gainers after China’s government appeared to move ahead with stimulus policies, which stoked a steep rally in Asian stocks and bolstered heavy-equipment makers and natural-resource stocks. Read more on stimulus in China.
The indexes reached their highs of the day after a disappointing reading on U.S. consumer confidence. That action, following a jump in Japan’s Nikkei 225 JP:100000018 +0.74% after a weak Japanese employment report, suggests more investors are betting on further global monetary stimulus to support a still-troubled global economy, according to one analyst. Read more on rise in Japan’s jobless rate.
“Weaker economic news here and subdued inflation might be bullish for stocks in terms of more Fed medicine and [stimulus] from other central banks,” said Nick Raich, direct of research at Key Private Bank in Cleveland. “The market is anticipating more stimulus.”
After surging in the first hour of trading, stocks gave up nearly half of their rise after the euro fell below $1.25 EURUSD -0.43% , a move that followed ratings agency Egan-Jones Rating Co. downgrading Spain’s credit rating. Spain’s fiscal problems and its deteriorating banking sector have been a growing cause for concern in recent weeks. Read more on currencies.
The S&P 500 Index SPX +0.90% rose 8.84 points, or 0.7%, to 1,326.76. All 10 industry sectors were higher, led by materials and tech.
The Nasdaq Composite Index COMP +0.97% advanced 22.26 points, or 0.8%, to 2,859.79.
U.S. markets were closed Monday for the Memorial Day holiday.
In Greece, polls showed that the conservative New Democracy party was ahead of the antibailout, left-wing Syriza. The debt-laden nation will hold an election June 17, as concerns grow over whether Greece will stay committed to austerity measures and remain in the euro zone.
The polls “bring back to front and center that Greek people don’t want to leave the euro,” said Michael Gibbs, co-head of the equity-advisory group at Raymond James in Memphis. “The market is taking that as a positive.”
Should investors receive some degree of calm about Greece, they could shift focus to U.S. data, which include nonfarm payrolls and the Institute for Supply Management’s manufacturing survey on Friday, Gibbs added.
The string of lower-tier releases Tuesday were mixed. The Chicago Fed Midwest Manufacturing Index rose 2.4% in April, to a seasonally adjusted level of 94.2. However, U.S. home prices were unchanged in March, according to the S&P/Case-Shiller 20-city composite index.
Also, a measure of consumer confidence unexpectedly dropped in May to the lowest level since January, the Conference Board reported. Read more on consumer confidence.
The Dow fell 0.6% on Friday, but it rose 0.7% last week, snapping a three-week losing streak.
“The market has put in a technical bottom,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “We will probably see a slightly better tone to the market this week, but the bias will remain defensive.”
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Bilderberg’s Syngenta Settles After Contaminating U.S. Water Supply
Notice the highly racist nature of the Bilderberg Crowd, both killing devils are Anglomasons. One a Taylor from Barclays bank the other and American Taylor from the Anglo-Zionist firm of Monsanto. Anglosaxons in the USA seem to have a real evil gene. They are a small percentage of the USA, but 50 pc of the crimes against humanity.
GMO Firm Syngenta allegedly tainted the water supply of 52 million with hormonally-disruptive chemical
May 29, 2012
The Swiss-based GMO company Syngenta settled a class action lawsuit for some $105 million over the dangers posed by its gender-bending herbicide Atrazine.
Water utilities in the U.S. Midwest sued over alleged contamination resulting from Syngenta’s weed killer Atrazine, which leaked into systems and potentially affected the drinking supply of some 52 million Americans in more than 2,000 water districts, according to the Wall Street Journal.
Atrazine, used as a herbicide by half of American corn growers, is banned in Europe and linked to “disrupting sexual reproductions in frogs” with some studies also linked to reproductive problems in humans.
However, Syngenta maintains that Atrazine is “safe,” and admitted no liability in its lawsuit settlement. “No one ever has or ever could be exposed to enough atrazine in water to affect their health,” a statement from the company claimed, perhaps ludicrously.
The EPA for its part has refused to ban Atrazine, but has looked at its potential dangers, and claims a “robust” regulation process that keeps America safe. However, a closer look at regulatory agencies including the FDA, EPA and USDA has demonstrated dangerous and uncomfortable dominance from biotech industry lobbyists. For instance, former Monsanto Vice President and lobbyist Michael R. Taylor (no known relation to Syngenta’s top exec) is the classic example of revolving door corruption, with a top post at the FDA and a role in ..
Sandberg/Zuckerberg Crime Watch
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Europe’s debtors must pawn their gold for Eurobond Redemption-AEP-More of Professor Bofinger’s madness
Southern Europe’s debtor states must pledge their gold reserves and national treasure as collateral under a €2.3 trillion stabilisation plan gaining momentum in Germany.
The German scheme — known as the European Redemption Pact — offers a form of “Eurobonds Lite” that can be squared with the German constitution and breaks the political logjam. It is a highly creative way out of the debt crisis, but is not a soft option for Italy, Spain, Portugal, and other states in trouble.
The plan is drafted by the German Council of Economic Experts and inspired by Alexander Hamilton’s Sinking Fund in the United States — created in 1790 to clean up the morass of debts left by the Revolutionary War. Flourishing Virginia was comparable to Germany today.
Chancellor Angela Merkel shot down the proposals last November as “completely impossible”, but Europe’s crisis has since festered, and her Christian Democrat party has since suffered crushing defeats in regional elections.
The Social Democrat opposition supports the idea. The Greens say they will block ratification of the EU Fiscal Compact in the German Bundesrat — or upper house — unless Mrs Merkel relents.
“The Redemption Pact cleverly combines the advantages of lower interest rates through joint European borrowing with a reduction of debt,” says Green leader Jürgen Trittin. “Joint liability would be limited in both time and scale.”
The plan splits the public debts of EMU states. Anything up to the Maastricht limit of 60pc of GDP would remain sovereign. Anything over 60pc would be transfered gradually into the redemption fund. This would be covered by joint bonds.
Italy would switch €958bn, Germany €578bn, France €498bn, and so forth. The total was €2.326 trillion as of November but is rising fast as Europe’s slump corrupts debt dynamics. The sinking fund would slowly retire debt over twenty years, using designated tithes akin to Germany’s “Solidarity Surcharge”.
In effect, Germany would share its credit card to slash debt costs for Italy, Spain and others. Yet it is the exact opposition of fiscal union. While eurobonds are a federalising catalyst, the fund would be temporary and self-extinguishing. “The fund is a return to the discipline of Maastricht with sovereign control over budgets,” said Dr Benjamin Weigert, the Council of Experts’s general-secretary.
The ingenious design gets around the German constitutional court, which ruled in September that the budgetary powers of the Bundestag cannot be alienated to any EU body under the Basic Law — the founding text of Germany’s vibrant post-War democracy.
The court warned that open-ended liabilities are unconstitutional. The Bundestag may not establish “permanent mechanisms which result in an assumption of liability for other states’ voluntary decisions, especially if they have consequences whose impact is difficult to calculate,” it ruled. Chief Justice Andreas Vosskuhle said that any major step towards EU fiscal union would require “a new constitution” and a referendum.
The fund implies a big sacrifice for Germany. Its interest costs on joint debt would be much higher than today’s safe-haven rate of 1.37pc on 10-year Bunds. Jefferies Fixed Income says it would cost 0.6pc of German GDP annually. The Council of Experts — or `Five Wise Men’ — argue that this would be modest compared to the growth adrenaline of rescusitating monetary union.
Yet it is not charity either. One official said a key motive is to relieve the European Central Bank of its duties as chief fire-fighter. “We have got to get the ECB out of the game of distributing money, and separate fiscal and monetary policy. Germany has only two votes on the ECB Council and has no way to control consolidation,” he said.
Germany would have a lockhold over the fund, able to enforce discipline. Each state would have to pledge 20pc of their debt as collateral. “The assets could be taken from the country’s currency and gold reserves. The collateral nominated would only be used in the event that a country does not meet its payment obligations,” said the proposal.
This demand could enflame opinion in Italy and Portugal. Both states have kept their bullion, resisting the rush to sell by Britain and others. Italy has 2,451 tonnes of gold, valued at €98bn in March.
Alessandro di Carpegna Brivio, a gold expert at Camperio Sim in Milan, said Italy should treat such proposals with care. “Everything being done at a European level is in the interests of Germany and France, to save their banks. It is not in the interest of Italy,” he said.
“We should use our gold to take care of our own debt, collateralizing bonds above 100pc of GDP. That would be a far more targeted approach,” he said.
David Marsh, author of books on the euro and the Bundesbank, said Germany is not yet ready for the redemption fund. “The Germans have to do something, but I don’t think it will happen before the elections next year. Spain will have to go through storm first,” he said.
Ultimately, a sinking fund cannot tackle the root cause of the eurozone crisis. It may cap debt costs but it does not alter the intra-EMU currency misalignment between North and South, or help the Latin states close the chasm in labour competitiveness.
The South would still face the long grind of “internal devaluation” — or wage deflation — breaking societies on the wheel. Yet the Redemption Pact is at least a first step back from Purgatory.
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Madoff Case Is Paying Off for Hebrew “Trustee” ($850 an Hour)
So far, Mr. Picard’s efforts have created a whopping $554 million in legal and other fees. How much have Mr. Madoff’s victims actually received from all of the cases and motions he’s made? Only $330 million. And how much does Mr. Picard estimate the fee spigot will pour out by 2014? A mere $1 billion…
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Worker Confidence in U.S. Fell in May to Four-Month Low
Confidence among U.S. consumers unexpectedly fell in May to the lowest level in four months as Americans grew more pessimistic about the labor market.
The Conference Board’s confidence index decreased to 64.9 from a revised 68.7 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6.
The weakest payroll gains in six months may raise concerns that economic growth is not fast enough to bring down the jobless rate. More employment is needed to boost consumer spending, which accounts for about 70 percent of the economy.
“Sentiment is still relatively subdued,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. “Ongoing softness in the labor and housing markets, as well as the political bickering in Washington and on the campaign trail” is weighing on consumers.
Home prices in 20 U.S. cities fell in the 12 months ended in March at the slowest pace in more than a year, other data today showed. The S&P/Case-Shiller index of property values declined 2.6 percent from a year earlier, the smallest decrease since December 2010, after a 3.5 percent drop in February, the group reported in New York.
Estimates for consumer confidence ranged from 62 to 74.1 in the Bloomberg survey of 70 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.
The decline in the Conference Board’s measure is in line with readings from the Bloomberg Consumer Comfort Index, which dropped for four consecutive weeks after reaching a four-year high in mid-April. Both gauges are at odds with the Thomson Reuters/University of Michigan’s measure, which climbed this month to the highest level since October 2007.
“Taken together, the retreat in the present situation index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
The share of consumers who said jobs are currently plentiful decreased to 7.9 percent from 8.4 percent. Those who said jobs are hard to get climbed to 41 percent from 38.1 percent.
The percent of respondents expecting more jobs to become available in the next six months decreased to 15.8, the lowest this year, from 16.9 the previous month. The proportion who expect their incomes to rise over the next six months advanced to 15.2 percent from 13.9 percent. Even with the gain, income expectations are down from the end of 2011.
Buying plans held up in May. The share of households planning to buy autos and appliances increased.
Employers have increased payrolls by 1.18 million workers over the past six months, and the jobless rate dropped to 8.1 percent in April, compared with 8.9 percent in October. Still, employment growth has slowed in the last three months.
“The U.S. environment remains challenging, marked by still-low consumer confidence” and “changing consumer behavior,” Christopher Scott O’Hara, executive vice president at H.J. Heinz Co., the maker of the namesake condiments and Ore- Ida potato snacks, said on a May 24 conference call with analysts.
U.S. Stocks Rise as Investors Await Confidence Report
U.S. stocks advanced, following the first weekly gain since April in the Standard & Poor’s 500 Index, as a report showed the American housing market is stabilizing and investors awaited consumer confidence data.
Caterpillar Inc. (CAT) and Bank of America Corp. (BAC) added at least 1.2 percent to pace gains in the biggest companies. Peabody Energy Corp. (BTU) rose 4.9 percent as Goldman Sachs Group Inc. raised its rating for the coal producer. Vertex Pharmaceuticals Inc. (VRTX) sank 21 percent after the company revised results reported three weeks ago from a study of two cystic fibrosis drugs.
The S&P 500 advanced 0.7 percent to 1,327 at 9:37 a.m. New York time. It gained 1.7 percent last week amid the cheapest valuations since November. The Dow Jones Industrial Average increased 92.63 points, or 0.7 percent, to 12,547.46 today. The U.S. market was closed yesterday for the Memorial Day holiday.
“Expectations are depressed,” said Jeremy Batstone-Carr, head of research at Charles Stanley & Co. in London. “Therefore, it is possible that if data beats worst-case fears, that could provide some stimulus for the market. It’s not as if everybody is looking for a gung-ho performance from the U.S. economy.”
Today’s economic data may show that falling gas prices and an improving labor market have boosted consumer confidence. The Conference Board’s gauge climbed to 69.5 in May from 69.2 in April, according to a Bloomberg survey of economists. A report today showed that home values in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year.
The S&P 500 is down 5.1 percent in May, heading for its biggest monthly retreat since September, amid concern global economic growth is slowing and Greece may leave the euro area. European Central Bank Governing Council member Ewald Nowotny today said the bank isn’t considering restarting its bond- purchase program to stem rising borrowing costs for governments in the euro area. He added that the “prime objective” is to keep Greece in the euro area.
Some of the largest companies gained today. Caterpillar, the world’s biggest maker of construction equipment, added 1.7 percent to $91.43. Bank of America rose 1.2 percent to $7.24.
Peabody Energy jumped 4.9 percent to $25.06. Goldman Sachs raised its recommendation to buy from neutral, citing improving China data.
Vertex slumped 21 percent to $50.98. A misinterpretation between Vertex and an outside data-analysis firm led to the revised results, the Cambridge, Massachusetts-based biotechnology company said today. It doesn’t affect Vertex’s plans to start final-stage trials for U.S. marketing approval, said Zach Barber, a spokesman.
Stock buybacks are falling to a three-year low just as U.S. chief executive officers boost spending on plants and equipment to a record.
Companies announced $1.1 billion of repurchases a day on average during the earnings season in April and May, the lowest level since mid-2009, according to data compiled by Bloomberg and TrimTabs Investment Research Inc. Capital spending in the U.S. has risen since 2010 and reached $63.6 billion in March. Devon Energy Corp. (DVN) eliminated buybacks and boosted exploration and production spending 18 percent. United Parcel Service Inc. cut repurchases in order to buy TNT Express NV.
After the biggest first-quarter gain for the S&P 500 since 1998, bears say the 58 percent decline in buybacks removes key support for equities amid Europe’s debt crisis and a weakening U.S. recovery.
While orders for capital equipment fell last month, bulls say the two-year gain in business investment shows CEOs are growing more optimistic, spending to raise profits instead of reducing stock to boost per-share earnings.
“Investors and corporations themselves are best served when the cash is applied to improving capital investment, as opposed to buying stock back,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $85 billion, said in a May 22 phone interview. “That would be much more bullish.”